NAFI TEST EXAM 2026 EXAM PREPARATION
PACK KEY SAFETY PROCEDURES
OPERATIONAL STANDARDS AND INDUSTRY
REGULATIONS WITH SAMPLE QUESTIONS
◉ What does a standard title insurance policy do?* Answer: protects
against any defects discovered in the title after closing
◉ Which term describes the transfer of property from the current
owner to another party by sale or gift?* Answer: voluntary
alienation
◉ In the sales comparison approach to property valuation, what
does the principle of substitution state?* Answer: The value of a
property is only what a consumer would pay to acquire a
comparable property.
◉ Who can require a buyer to purchase homeowners insurance?
Answer: lender
◉ Which of the following statements may represent the
unauthorized practice of law?* Answer: "You should proceed
without ordering a new abstract - this title is clear."
,◉ A property owner has the right to tell other people that they
cannot trespass on their property. What is this right called? Answer:
right of exclusion
◉ The term for when the client initiates the termination of the
agency agreement is known as: Answer: revocation
◉ Which of the following terms refers to a surveyor's or developer's
map that identifies lots and blocks? Answer: plat
◉ The statute of frauds requires that real estate agreements:
Answer: be in writing
◉ Which type of deed includes the five implied warranties
(covenants)? Answer: general warranty deed
◉ Which of these scenarios does NOT violate fair housing law?
Answer: An agent advertises a senior citizen community with the
phrase "no children allowed."
◉ What is the difference between a bill of sale and a deed? Answer:
A bill of sale is for personal property; a deed is for real estate.
, ◉ A buyer offers additional consideration to add a 10-day option
period to the sales contract. During this period, the buyer can:*
Answer: terminate the contract for any reason
◉ Brenda and her husband are interested in buying a house that was
constructed in 1971 that has all the original paint, windows, and
flooring. What is required from the listing agent in this situation?*
Answer: The agent needs to furnish the buyers with a pamphlet
approved by the EPA concerning lead based paint prior to closing.
◉ In order to be valid, what MUST a deed have? Answer: a legal
description
◉ Hans bought an investment property for $5,250,000. The NOI of
this property is $367,500. At what cap rate did he purchase this
property? Answer: 7%
◉ What does the principle of anticipation state about the valuation
of property? Answer: The present value of a property is affected by
the anticipated income or utility that property will give its property
owner.
◉ Which of these is a naturally occurring mineral that is commonly
used in insulation, but if airborne or inhaled, can cause severe
respiratory health issues? Answer: abestos
PACK KEY SAFETY PROCEDURES
OPERATIONAL STANDARDS AND INDUSTRY
REGULATIONS WITH SAMPLE QUESTIONS
◉ What does a standard title insurance policy do?* Answer: protects
against any defects discovered in the title after closing
◉ Which term describes the transfer of property from the current
owner to another party by sale or gift?* Answer: voluntary
alienation
◉ In the sales comparison approach to property valuation, what
does the principle of substitution state?* Answer: The value of a
property is only what a consumer would pay to acquire a
comparable property.
◉ Who can require a buyer to purchase homeowners insurance?
Answer: lender
◉ Which of the following statements may represent the
unauthorized practice of law?* Answer: "You should proceed
without ordering a new abstract - this title is clear."
,◉ A property owner has the right to tell other people that they
cannot trespass on their property. What is this right called? Answer:
right of exclusion
◉ The term for when the client initiates the termination of the
agency agreement is known as: Answer: revocation
◉ Which of the following terms refers to a surveyor's or developer's
map that identifies lots and blocks? Answer: plat
◉ The statute of frauds requires that real estate agreements:
Answer: be in writing
◉ Which type of deed includes the five implied warranties
(covenants)? Answer: general warranty deed
◉ Which of these scenarios does NOT violate fair housing law?
Answer: An agent advertises a senior citizen community with the
phrase "no children allowed."
◉ What is the difference between a bill of sale and a deed? Answer:
A bill of sale is for personal property; a deed is for real estate.
, ◉ A buyer offers additional consideration to add a 10-day option
period to the sales contract. During this period, the buyer can:*
Answer: terminate the contract for any reason
◉ Brenda and her husband are interested in buying a house that was
constructed in 1971 that has all the original paint, windows, and
flooring. What is required from the listing agent in this situation?*
Answer: The agent needs to furnish the buyers with a pamphlet
approved by the EPA concerning lead based paint prior to closing.
◉ In order to be valid, what MUST a deed have? Answer: a legal
description
◉ Hans bought an investment property for $5,250,000. The NOI of
this property is $367,500. At what cap rate did he purchase this
property? Answer: 7%
◉ What does the principle of anticipation state about the valuation
of property? Answer: The present value of a property is affected by
the anticipated income or utility that property will give its property
owner.
◉ Which of these is a naturally occurring mineral that is commonly
used in insulation, but if airborne or inhaled, can cause severe
respiratory health issues? Answer: abestos
